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Tomato Trade Deal Averts Clash With Mexico

Agreement raises minimum wholesale prices for Mexican tomatoes in the U.S.

Feb 04, 2013

The U.S. Department of Commerce this week released a new preliminary agreement with Mexico to set a minimum wholesale price for tomatoes. The agreement comes after heated negotiations between both countries sparked concern that tomato prices could skyrocket in the U.S.

The proposed agreement, according to the commerce department, covers imports of all fresh or chilled tomatoes of Mexican origin, except tomatoes that are for processing. There have been three previous suspension agreements covering imports of fresh tomatoes from Mexico, signed in 1996, 2002 and 2008, respectively.

Agreement raises minimum wholesale prices for Mexican tomatoes in the U.S.

The new agreement raises prices for winter tomatoes by nearly 10 cents – from 21.69 cents a pound to 31 cents – and summer tomatoes from 17.20 cents to 24.58 cents. It also prevents price undercutting and price suppression in the U.S. market and eliminates at least 85% of the dumping, according to the commerce department.

Comments on the proposal are due by Feb. 11. A final agreement is expected by March 4.

Francisco J. Sánchez, U.S. undersecretary of commerce for international trade, said in a statement that the draft agreement "accounts for changes that have occurred in the tomato market since the signing of the original agreement."

Agriculture Secretary Tom Vilsack said in a statement Saturday that the agreement represents a level playing field.

"The draft agreement meets the requirements of U.S. antidumping law and provides an effective remedy for our domestic tomato producers, further bolstering agriculture as a bright spot in our nation's economy. The United States is one of the world's leading producers of tasty, high-quality tomatoes. Our U.S. fresh and processed tomatoes account for more than $2 billion in cash receipts and support thousands of American jobs in our food industry, shipping, processing and more."

However, Lance Jungmeyer, President of the trade group Fresh Produce Association of the Americas, said the agreement wasn't exactly what his group had in mind.

"For months, we have been urging the U.S. Commerce Department to continue the U.S.-Mexico tomatoes suspension agreement, which has brought peace and stability to the U.S. market for fresh vegetable for 16 years," Jungmeyer said. "This new deal goes past protecting the U.S. Industry from injury. For months, the Florida growers have been pushing the U.S. Government to close the market to tomato imports from Mexico, even though this position is not justified by the facts. I can only predict that these prices will lock a big portion of Mexican production out of the market. That will serve no one other than the self-serving interests of an inefficient Florida industry."